Swedish grocery retailer and wholesaler Axfood has revealed a decline in first-quarter profits on sluggish sales.
During the three months to the end of March, Axfood said that its operating profit dropped 0.6% to SEK241m (US$39.3m), while net profit declined 1.1% to SEK172m.
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The company said that margins were dented by a “high pace of establishment and refurbishment” and increasing competitive pressures.
Sales were also weak, the retailer revealed this morning (20 April). Total sales edged up 0.6% to SEK8.26bn, However, sales at company-owned stores dropped 0.4% while like-for-like sales fell 2.4%.
Axfood said that its sales had been hit by a “sluggish food retail market” as well as the late Easter, which hurt year-on-year comparisons.
Nevertheless, Axfood insisted that it will continue to push ahead with its programme of new store openings and store revamps. It said that it would look to offset these expenses with a greater focus on “efficiency and stringent cost control”.
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By GlobalDataThe company added that it would also invest in the continuing development of its own label offering, with private-label sales accounting for 23% of total sales in the quarter – a record for the retailer.
Shares in Axfood were down 4.7% to to SEK2.14 at 12.20 today.
